SB 228-OUTSTANDING NAT'L RESOURCE WATER  4:35:06 PM VICE CHAIR MICCICHE announced the consideration of SENATE BILL NO. 228 "An Act requiring the designation of outstanding national resource water to occur only by statute; relating to the management of outstanding national resource water by the Department of Environmental Conservation; and providing for an effective date." 4:35:41 PM RANDY BATES, Director, Division of Water, Department of Environmental Conservation, Juneau, Alaska, paraphrased prepared remarks: [Original punctuation provided.] Outstanding Natural Resource Waters, ONRWs or Tier 3 waters, are defined as waters of "of exceptional recreational or ecological significance" which shall be "maintained and protected" from degradation in perpetuity. A Tier 3 designation of a waterbody bestows the highest level of water quality protection under the federal Clean Water Act and restricts a wide range of activities on these waters as well as on adjacent lands. Since 1983, the Clean Water Act has required that each state establish an ONRW or Tier 3 designation process. 4:36:48 PM MR. BATES continued. [Original punctuation provided.] Alaska has a process in place, formalized in November 2018 in the form of a Department Policy and Procedure, that essentially reads the same as the bill "The current process for nominating Tier 3 waters involves proposing the introduction of legislation to make the designation. Any such request may go to a legislative representative or committee for consideration for introduction as a legislative bill. Typically, a request to an individual legislator would go to a legislator whose district contains the proposed Tier 3 water." Because the designation of a Tier 3 water carries with it the requirement to maintain and protect the water quality from degradation in perpetuity, the designation restricts a wide range of activities on the waters and adjacent areas, to include • road and building construction • recreational activities • seafood processing • municipal wastewater discharge and septic systems • storm water discharge • landfills • gravel quarries • large-scale resource development projects and or any other activity that might affect the designated water 4:38:12 PM MR. BATES continued. [Original punctuation provided.] Such widespread impacts effectively make Tier 3 designation a de facto land and water use decision, one that may be based on designation criteria well outside the Department's expertise and authority. For illustration purposes, consider a Tier 3 nomination on any Special River as an example. A party could nominate that Special River for its exceptional recreational significance for its sportfishing opportunities. There is no doubt that this is a special river and watershed, and it should be managed accordingly, as all the agencies with expertise and management authority currently do. However, designation as a Tier 3 waterbody requires that the water quality on the Special River be maintained and protected in perpetuity for the reasons designated and for the water quality at the time of designation. What that practically means is that no new or increased discharges to the river or its tributaries would be permitted if the discharges would result in lowering or degrading the water quality. That has potential long-term if not permanent adjacent and upstream land-use consequences no new discharge contributions that lower or degrade water quality, whether those new discharges meet water quality standards or not. That would potentially eliminate road improvements in the area, increased or changed discharges from municipal wastewater treatment facilities, increased recreational opportunities, seafood processing, or anything else that might affect the water quality. The designation of a Tier 3 water includes significant use restrictions and requires a substantial evaluation on the use of a waterbody that exceeds the Department's statutory authority. 4:40:16 PM MR. BATES continued. [Original punctuation provided.] The Department has proposed this bill to formalize that the designation of Tier 3 waters would be accomplished, appropriately, by the legislature through statute, and having that legislative process would provide two very important things: 1. A full and public process engaging all the interested and affected parties, including those communities, residents, users, developers, and conservationists, and also those agencies with oversight responsibilities for the area lands and waters; and 2. A full discussion on the consequences, restrictions, or impact to other activities and potential activities by the designation, including future and foreseeable activities. 4:41:07 PM Providing for the designation of a Tier 3 water as structured in the bill will bring certainty to the process and would codify in statute a consistent practice for how lands and waters across the state would be designated for conservation by legislative approval rather than by division, department, or judicial discretion. 4:41:49 PM SENATOR KIEHL asked whether the courts have created a Tier 3 designation in the absence of a structure or framework. MR. BATES said he was unaware of any judicial decision. He explained that DEC's Tier 3 decisions could potentially be litigated. DEC would prefer to have land use decisions made by the legislature, not have them made by an agency or the courts. SENATOR KIEHL said he understood the arguments about impacts on adjacent lands, but these are not land use decisions but are water quality decisions under the Clean Water Act. MR. BATES answered that the reasons for Tier 3 designations could go beyond simple water quality to recreational or ecological purposes. He referred to his earlier example of a special river, relating that a waterbody could be designated as Tier 3 because of its extraordinary fishery or the rafting opportunities. However, those reasons fall well outside the bounds of the expertise and authority of the Division of Water, which focuses on water quality. 4:44:01 PM SENATOR KIEHL commented that it was an interesting dilemma. He offered his belief that the legislature provides various state agencies with significantly more authority than this. For example, DNR can sell land, which would impact land use. DOT&PF can construct a highway, creating significant rights-of-way. He said it always seems strange when a bill says the legislature can pass a bill. 4:45:13 PM VICE CHAIR MICCICHE asked why the administration brought the bill to the legislature. MR. BATES answered that DEC believes the legislature is the proper forum to consider the broader implications of Tier 3 designations. He emphasized that the Tier 3 designation locks in the water quality. This means there cannot be any increased contribution that would degrade water quality. Suppose there was a publicly-owned wastewater facility located upstream of a Tier 3 river. It would mean that the surrounding population cannot increase because it would increase the discharge from the publicly-owned utility and contribute some pollutants beyond the water quality classification of a Tier 3 river. It would also mean that recreational user opportunities could not be increased in the area. He opined that the Tier 3 designation has the potential to lock up waters and preserve them in perpetuity. He acknowledged that might be appropriate in some circumstances. Still, it is a major decision that would prevent and preclude the development of any other activity that would contribute to the degradation of the water quality of the Tier 3 river, even if the permitting process could mitigate the impacts. He emphasized that a Tier 3 designation means that the activity cannot degrade or contribute to water quality degradation of the Tier 3 waterbody. 4:47:35 PM MR. BATES said DEC believes this goes beyond the bounds of DEC's authority, focus and discretion because it may require designating areas for subsistence, fishery, or recreational use and tread on another agency's authority. The legislature designates critical habitat areas, and that same process should be used for Tier 3 designations. 4:48:25 PM SENATOR KIEHL related his understanding that temporary impacts to water resulting from building or improving roads were permitted and that roads have been improved through Tier 3 watersheds elsewhere in the country. MR. BATES responded that temporary and de minimis activities are allowed so long as the activities do not contribute to poor water quality. Thus, temporary impacts related to road construction could be accommodated for short periods. However, if the road results in increased stormwater runoff or contributes to nonpoint source pollution, DEC could not permit the road building activity or construction of a mall at the end of the road. 4:49:57 PM SENATOR KAWASAKI asked if Tier 3 designations could ever be amended or removed. MR. BATES answered that he was unaware of a process to withdraw a designation. He related that his division had queried other states, and no one had attempted to do so. SENATOR KAWASAKI commented that the dimensions of water bodies occur because of climate change. He asked how that would affect a Tier 3 designation. MR. BATES acknowledged that was a fair point. He explained that the Division of Water only has the authority to control permitted activities and, to the extent it can, nonpoint source activities that contain material that enters the water bodies. He offered his view that if climate change impacts result in increased turbidity, DEC we need to develop a management plan to address it. For example, a highly sulfuric warm spring with a temperature of 104 degrees Fahrenheit could be designated as a Tier 3 waterbody. He was unsure how DEC would respond if the temperature increased to 108 degrees. 4:52:25 PM VICE CHAIR MICCICHE stated that the committee previously discussed SB 227, which requests Section 404, Clean Water Act primacy. He wondered if this bill punts the issue to the legislature and how the legislature would handle Tier 3 determinations since DEC uses a science-based approach to make them. MR. BATES offered his view that DEC has an exceptionally skilled, science-based staff that permits, evaluates, and mitigates water quality to avoid negative impacts and meet water quality standards to move projects forward. DEC conducts fieldwork and samples water throughout the state. He noted that DEC's website explains these activities. Instead of punting, DEC would bring a level of expertise and science to the legislative process related to Tier 3 designations. However, Tier 3 designations carry an opportunity to adversely impact activities beyond water quality, such as fishery management, which fall outside their area of expertise. He said DEC would like to participate in the process related to water quality. He offered to expand his response to address Section 404 permits if desired. 4:55:40 PM VICE CHAIR MICCICHE was unsure how the process would work under SB 228. He asked if the bill were to pass, how the legislature would make the Tier 3 determinations: if legislators would decide a water body should be designated and introduce a bill. He wondered if the goal was never to have an outstanding national resource waterbody. 4:57:17 PM MR. BATES stated that if SB 228 were to pass, a legislator or a committee could introduce a bill on behalf of a constituent that would identify the boundaries of a special river as a Tier 3 waterbody and list the reasons, including a minimum amount of background information to support the request. This would mirror DEC's current process. He surmised that testimony would reveal the science, policy, and justification during the public process. For example, ADF&G could testify on matters related to fisheries management, DNR on navigability and allowable watercraft, DEC on water quality aspects, and landowners along the river would weigh in on resource development activities that could contribute to the river's water quality degradation. He characterized the legislative process as a robust one. MR. BATES responded to Senator Micciche's question on how science affects Section 404 permitting, relating that DEC's staff is exceptionally skilled in evaluating, permitting, and conditioning projects. Under the Section 404 permitting process, DEC imposes jurisdictional determinations, and the US Corps of Engineers implements them. He related that to determine if the activity is in US waters as defined under federal law, DEC would evaluate the hydrology, flora, and fauna typically found in wetlands, which are considered waters of the US. He characterized the process DEC uses to determine whether the activity requires a Section 404 permit as a prescriptive scientific process. 5:00:34 PM SENATOR BISHOP said suppose the administration or a legislator were to bring a bill forward to nominate a Tier 3 waterbody. Suppose the waterbody consisted of a 10-mile waterway connected to the Yukon River. He asked for an estimate of the cost to perform the background to bring a bill forward, noting that while the department has its experts, the legislature also has its experts. MR. BATES offered to research this and report to the committee. However, the legislature currently considers bills ranging from simple to complex ones. He surmised that someone who would nominate a 10-mile stretch of water would likely compile several years of data and provide justification to support designating the river as Tier 3 to allow the legislature to make a rational decision. Under the current process, DEC would want to know why the Tier 3 designation was necessary, any associated costs, what outreach was done to assess development activities in the area, and what activities could be precluded to understand the consequences of the Tier 3 designation. 5:03:35 PM SENATOR KIEHL said suppose a Tier 3 waterbody is somehow designated, but it shouldn't have been. He wondered whether it could be undesignated. He asked Mr. Bates to clarify that no other state has a process to de-designate a Tier 3 designation. He stated that three years ago, the Division of Water testified that the Environmental Protection Agency doesn't have any rules against it. EPA's correspondence to DEC indicated the agency didn't have any objections to having it delisted or de- designated. He asked whether there was any conflict or if both were accurate. MR. BATES answered that he does not see any conflict. He said he is unaware another state has a de-designation process. He further responded that he was aware that EPA does not have a prohibition against de-designating a Tier 3 waterbody. He offered to follow up with the committee. 5:05:28 PM VICE CHAIR MICCICHE opened public testimony SB 228. 5:05:50 PM LINDSEY BLOOM, Campaign Strategist, SalmonState, Juneau, Alaska, spoke in opposition to SB 228. SalmonState is a nonprofit organization working throughout Alaska, focused on salmon and fishery conservation issues. She surmised from the questions asked that many committee members are familiar with the issues. She stated that she had been part of that application in the past and was willing to discuss her experience. MS. BLOOM stated that SalmonState believes that DEC has the authority and in-house expertise to process applications and use its highly skilled staff to review the criteria and determine whether the waterbody should be designated as Tier 3. She noted that DEC wants to punt this to the legislature and politicize the issue. Tier 3 designations should be based on a scientific process. She stated that requiring the legislature to designate the outstanding national resource waters is the wrong direction to go. 5:08:10 PM SENATOR STEVENS said he is always concerned about water quality and protecting the environment. Still, he is also worried about imposing restrictions on industry, which could bring fisheries ashore instead of at sea. He asked whether some of these restrictions could damage the industry. MS. BLOOM answered that she was not concerned. As Mr. Bates stated, there would be allowances for temporary and de minimis discharges to Tier 3 designated waterbodies. She said Bristol Bay is one of the fisheries she had participated in on the Naknek River. She suggested if that river were designated as a Tier 3 river, it would mean economic activity could not occur that would permanently impair the waterbody and affect seafood processors. She offered her belief that the fishing industry's discharges would fall within the temporary and de minimis category. She offered her view that the state should protect many salmon streams, so their water quality is not diminished and compromised because many of Alaska's coastal communities depend on these fisheries. 5:10:04 PM SENATOR STEVENS wondered why Ms. Bloom was in opposition to SB 228. MS. BLOOM responded that she opposes SB 228 because the agency has been negligent in its responsibility to process applications and make decisions on Tier 3 determinations. She related that she was specifically involved in a Tier 3 application for Solara Creek, a salmon-producing headwater in the Bristol Bay watershed that was nominated years ago. DEC rejected the application because DEC refused to create the process necessary to approve or deny these applications. She emphasized that the agency should focus on the scientific criteria, and if a nomination meets the criteria, the waterbody should be protected and designated. She offered her belief that the process does not need additional layers of political and legislative debate because it does not serve Alaskans. 5:11:53 PM AARON BRAKEL, Inside Passage Waters Program Manager, Southeast Alaska Conservation Council, Juneau, Alaska, spoke in opposition to having a legislative-only approach to designating Tier 3 waterbodies in SB 228. MR. BRAKEL stated that the legislature could delegate its authority, which is appropriate in this instance. He clarified that he was not opposed to the legislature introducing a bill to designate a specific river or stream as outstanding national resource water. Still, there should be a scientific, community- based process to identify a waterbody as ONRW and go through a state and scientific process to designate the water. MR. BRAKEL suggested that if this Division of Water director doesn't believe it's within his jurisdiction to designate ONRWs, perhaps the next one might. He stated that Alaskans don't always experience the Division of Water's permitting process the same way the director represents it. He expressed concern about the permitting process. For example, he reviewed a mining permit, where it was clear to him that the State of Alaska had stepped back and allowed a discharge of metals to continue. However, he offered his view that a scientific process can be used for Tier 3 designations. He urged members not to pass the bill. 5:15:00 PM SENATOR BISHOP said he is a miner. He said he guarantees that DEC does not step back from the mining industry on the water quality going back into the streams. 5:15:37 PM VICE CHAIR MICCICHE closed public testimony on SB 228. VICE CHAIR MICCICHE held SB 228 in committee.